Utilize UDI and Barcode Scanning
Auditing field inventory presents a number of challenges, not the least of which is accuracy and investment of time. We’ve found that in instances of counting localized inventories, as well as auditing warehouse assets, barcode scanning can be very useful. Try utilizing our free UDIdentify app to scan all of your inventory, create a spreadsheet, and send that data to yourself via email. You can then use that data to reconcile what is in ConnectSx. You’ll want to make sure that you have at least the following data points in your audit results spreadsheet: catalog number, lot, quantity.
Alternatively, you can manage your audit manually using physical count worksheets you create yourself, or export inventory reports from Beacon.
Put Controls and Parameters around your Audit
It is a good idea to put controls on your inventory audit process to help keep things consistent, targeted, and manageable.
- Set Controls: Freeze inventory movement during an audit to ensure that the count is not a moving target. This can be minimized to just the inventory being audited at that time, to mitigate the impact to the operation. Regardless, it should be part of your plan. If you do not freeze inventory movement, you must consider activity that occurred while you were auditing and reconciling or your counts may be thrown off.
- Set Timelines: You don't want your audits to drag on forever. A long audit is often destined to be an inaccurate or failed audit. And worse, not reconciling your inventory immediately after an audit increased the chances that the end result will not be true. Particularly in instances of auditing Field Inventory Custodies and Trunk Stock, set clear timelines for execution including due dates for the audit and completion dates for reconciliation.
- Set Parameters: Perform audits in waves, for instance one custodian at a time or a group of custodians at a time. Be very specific about what you will audit in a given time frame to match with your capacity to execute and act on the results. Similarly you can isolate certain catalog #s, lots, locations etc. in your ORG inventory to make it more manageable.
- Manage Time and Reach Completion: You should aim to process and complete any inventory reconciliations before unfreezing inventory implicated in the audit. If you sit on your audit results before reconciling your inventory, every day of operational activity will put you farther away from your goal and make it extremely difficult to process your reconciliation in a straight forward way.
- Be Ready to Scrap Your Work: No one wants to do this, but a bad audit is just as bad as the bad inventory counts you started with. If you've lost confidence in your audit for any reason, consider scrapping it and starting over. Consider creating parameters for a failed audit in the planning phase to help guide this decision objectively, because it can be expected there will be resistance to starting over. Remember, the work you've done is a sunk cost, what matters is the end result.
Identify Discrepancies Surfaced by Your Audit
Below is a method of comparing your inventory audit counts in spreadsheet format to a current inventory report from Beacon to identify your discrepancies. This method would be done in a tool, such as Excel, and requires the use of advanced functions like vLookup and Concatenate.
This is not the only method for identifying your discrepancies, and you should be sure you understand how to use these functions before relying on them.
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Once you’ve performed your audit and you know what you physically have in your possession, you’ll need to compare with what is in your ConnectSx account. First access your inventory and Export inventory, then select “Unused Inventory Only”. This will generate a .csv for you of all of your active inventory.
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Next, you’ll want to copy your inventory data into a fresh tab in your audit results spreadsheet. In each tab (audit results and ConnectSx inventory), insert a column and concatenate your catalog number and lot number columns to create one identifying number for each catalog/lot combination – the formula should resemble something like this: =concatenate({catalog_number_column}, {lot_number_column}). This will allow us to perform a vlookup between the two tabs. If you have UDI data, feel free to utilize the UDI instead of creating this concatenation. If inventory from multiple custodians is implicated in your audit, you may need to add the custodian to your concatenation in order to make the two reference terms match. For more information on UDIs, check out this helpful link:
UDI Basics
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Next perform a vlookup to pull the quantities from your audit results tab over to your ConnectSx Inventory tab and clearly label the column as your audit results. You will utilize the concatenated columns as the search and reference terms, serving as the "like" data point between your two sheets and allowing you to use the Vlookup function to return the necessary audit result data to the proper rows in your reconciliation sheet.
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Now you can subtract these two quantities and see what changes in your inventory levels need to be made.
Reconcile your Inventory with the Audit Results
You've identified your inventory discrepancies as a result of an audit, now it's time to make the necessary changes to correct your inventory. Beacon will assist you using automated audit reconciliation tools, but other options are outlined below.
- Review your Audit Results and the Discrepancies: Be sure that these are all changes you want to make and be sure you understand them. Every discrepancy has its own story, sometimes large discrepancies warrant a deep dive into the history to understand what caused it.
- Reconcile the Discrepancies: There are multiple methods you can use to reconcile your inventory. Generally, rebalancing inventory is the preferred method, because when inventory is missing in one place it is likely an excess in another. Remember, processing your reconciliations immediately after each wave of your audit will ensure your counts do not become impacted by time and activity. Act on them when they are fresh and relevant.
- Rebalance with a Discrepant Custodian: Even if you are not using the Beacon Audit functionality, it is a good idea to create a custodian-only user to act as a clearinghouse for your discrepant inventory. You can rebalance inventory in a certain custody by transferring inventory away into the Discrepant Custodian. You may also be able to pull from other discrepant inventory to fill gaps in that custodian's inventory.
- Deactivate with a Stock Adjustment: If it is clear that inventory must be removed from your system, it is recommended to still move it to a Discrepant Custodian first, this will create a historical record of the move and will clearly delineate it from active inventory. The stock adjustment event allows you to deactivate inventory without making a sale, but still creating an Event Record of the inventory removal.
- Create New Inventory: If inventory is missing and you cannot locate where it should be rebalanced, then you may need to create new inventory to fill these gaps. Be sure about this course of action, because it is possible this could inflate your inventory artificially if the inventory exists elsewhere in your ecosystem. If you think you need to create a large amount of missing inventory, it may be a good idea to dive deeper into the details to understand why.
Maintain Thorough Records!
Particularly because you'll be managing some or all of your audit outside of Beacon, it is important to keep thorough and accurate records of the audit plan, the results, and the changes made. This may be relevant to future audits as well as financial reviews.